Payback Period and Net Present Value

XYZ Software, Inc., has the following mutually exclusive projects.

Year	Project A		Project B
0	$	-9,960		$	-10,400
1		6,800			5,800
2		4,100			2,900
3		2,700			6,900

Requirement 1:

(a) What is the payback period for Project A?

  Payback period                                 years

(b) What is the payback period for Project B? (Round your answer to 3 decimal places. (e.g., 32.16))

  Payback period                                 years

Requirement 2:

(a) What is the NPV for Project A assuming a discount rate of 14 percent? (Negative amount should be indicated by a minus sign. Do not include the dollar sign ($).

  Net present value         $

(b) What is the NPV for Project B assuming a discount rate of 14 percent? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.

  Net present value         $

Posted Date: 2/15/2013 3:06:33 AM | Location : United States

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